During the year, P. Nutt, the sole shareholder of a calendar year S corporation, received a distribution of $20,000. At the end of last year, his stock basis was $4,000. The corporation earned $11,000 ordinary income during the year. It has no accumulated E & P. Which statement is correct?

Question 1 options:

a) Nutts ordinary income is $15,000.

b) Nutts stock basis is $2,000.

c) Nutt recognizes a $5,000 LTCG.

d) Nutts tax-free return of capital is $11,000.